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Consider the Fiscal Year 2020-21 Draft Budget and the 7-Year Capital Improvement Program <br />June 16, 2020 <br />Page 5 <br />General Fund Ten -Year Outlook <br />Staff has updated the Ten -Year Outlook with the latest updates to the proposed budget. The <br />Outlook starts with the proposed budget in year 1, and applies the following assumptions for years <br />2-10. The Ten -Year Outlook is only one potential scenario, and actual results will vary. <br />The Ten -Year General Fund Outlook includes: <br />• Annual revenues and expenditures increase by CPI as forecasted by the California <br />Department of Finance (3.7% for FY21-22 and 3.8% thereafter). <br />• An assumed reduction of property tax revenue in FY21-22, resulting from decreased <br />property sales and assessments due to COVID-19. <br />• Measure X sales tax rate decreases from 1.5% to 1.0% in 2029. <br />• Expiration of the Vehicle Incentive Program in 2024. <br />• Removal of one-time items from the budget in future years. <br />• Increasing pension contributions based upon information provided by CalPERS. Staff used <br />the pension outlook tool provided by CalPERS to estimate the impact of the expected <br />current year 0% investment return on future contribution rates. <br />• Retirement of police facility debt in 2024. <br />Results of the Ten -Year Outlook indicate there is a General Fund revenue shortfall to sustain the <br />current expenditure structure. Staff recommends the City Council conduct a comprehensive review <br />of the current service model, and make changes to the budget structure to realign expenditures <br />with revenue. <br />Ten -Year General Fund Outlook <br />$490 <br />E456.7 <br />$475.8 <br />$444.3 <br />$450 <br />$426.] <br />$40].] <br />$410 <br />$389.1 <br />$3W.0 <br />$370 <br />$380.2 <br />$382.5 <br />$338.8 <br />$366.3 <br />$325 9 <br />$352.9 <br />$330 <br />$338.] <br />$325 9 <br />$314.0 <br />$307.4 <br />$290 <br />$250 <br />MO-21 <br />FY21-22 <br />FY22-23 FY23-24 FY24-25 FY25-26 FY26-27 <br />FY21-28 <br />FY 28-29 <br />FY 29-30 <br />- Revenue �Expendtures B Transfers Out <br />Capital Improvement Program (CIP) <br />The City Council's May 19 budget agenda item included the seven-year CIP. The Planning <br />Commission reviewed the document on May 26, 2020 and found it compliant with the City's <br />75A-1-5 <br />